question for new residents?

[dj dizzle]

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I am a new MSI, and I am new to this loan thing, so any help would be greatly appreciated. I had a question about picking a lender and loan consolidation. I figured new residents that just went through or are going through consolidation could answer this the best. Right now I am leaning toward using AAMC Medloans. Although there have been numerous posts complaining about the lack of customer service, poor servicer with Sallie Mae, and if you are late once, it takes 24 months of ontime payment to regain your repayment benefits. Now those are the cons. The plus side is you can get up to 1.75% in IRR once you get into repayment, which is competitive compared to other lenders. However the more important aspect is the .30% IRR during disbursement. This could be a huge savings, especially if you defer your repayment until after residency. .30% may not seem like much, but if you do the math over 4 years, that is a significant savings. Plus, if you reconsolidate after graduation like most med students, your repayment benefits go out the window anyways. So doesn't just make more sense to go with medloans and get the upfront savings now?! Please correct me if I am totally clueless about this loan situation.

 

[werewethere]

Sounds like a question for the financial forum.

 

[yaah]

Indeed. Moving.

 

[mshheaddoc]

Most of these loans (which I just found out) are very sneaky. Students will jump around to all these different lenders looking for the best deal. Funny part is, if you read the disclaimer, they have the right to change your deal AT ANY TIME.

With that prefaced, make sure you know the terminology and how they use it. Sometimes you get a "principal reduction" or a "interest rate deduction" and the ONLY thing you just did was speed up the amortization of the loan. Instead of 30 years, its now 24 years. Your payments will not decrease but the interest rate of the whole entire loan has changed so you are saving money but not for the here and now.

When it comes down to shopping for a lender, find out about the secondary market, read the fine print and decide waht do you really want. Do you want the best deal with a bunch of lenders or do you want to just have one payment when you graduate? Sure you can consolidate, but that costs money too.

Bottom line, know what you want out of a lender and what their terms are.

The more I read, the more I wish that they would have just kept the one direct lending. Competition is supposed to "better the community" but sadly that's not what we've seen. I think we'll see some changes in the future but this is for discussion on another thread!